Despite Moscow's stock market being shut down, these Russian ETFs are still trading in the U.S. Here's the explanation.

Several Russia-based stocks listed on the NYSE and Nasdaq have been halted from trading today.

While the Russian stock market in Moscow is shut down, U.S.-based Russian exchange-traded funds are currently trading in the U.S. this morning.

While there are five Russian ETFs trading in the U.S., only two have significant assets: (RSX) and (ERUS), which both track a market-cap-weighted index of Russian-listed securities.

This morning, the ERUS dropped over 18%, while the RSX fell nearly 30%.

What is the estimated value of the underlying securities for Russian ETFs to trade?

Harry Whitton, head of ETF sales trading at Old Mission Capital, stated that if the futures are down X, the stocks might be expected to be down Y.

Although it may seem unusual, Whitton notes that this scenario has occurred multiple times in the past. Specifically, Greece was shut down for six weeks several years ago, yet Greek ETFs in the U.S. remained active. When the Greek market eventually resumed trading, the Greek stocks were priced almost identically to the ETFs that had been trading them.

ETFs can be traded on the market even when the underlying market is closed.

Todd Rosenbluth, head of ETF and mutual fund research for CFRA Research, stated that the ETFs served as a representation of the Greek market.

Creation and redemptions may be an issue

ETFs have a critical feature that allows market participants to create and redeem new shares based on demand.

According to Rosenbluth, if some firms stop trading the underlying securities, it restricts the capacity to create and redeem ETF shares, making the fund a closed-end fund that trades at a premium or discount to the net asset value.

VanEck CEO Jan Van Eck stated in an email that although there are various sanctions affecting RSX, the firm continues to create and redeem shares of the VanEck Russia ETF (RSX).

The Russian ETFs are currently trading at a significant discount to their net asset value, or NAV, due to the fact that the NAV is frozen.

ETFs are attempting to determine the worth of Russian securities despite the closure of their underlying market.

The longer the Russian market remains closed, the more stale its NAV becomes.

Jan Van Eck, CEO of VanEck and manager of the VanEck Russia ETF (RSX), will appear on CNBC's Halftime Report at 12:35 PM ET and on ETF Edge at 1 PM:  ETFedge.bizfocushub.com.